Rajesh (Junior Accountant) (61 Points)
05 March 2009Hi,
I have a query.
Suppose i am paying rent to somebody for my office being taken on rent & the landlord is charging serivice tax on that. Now, i would like to vacate the premises before lock in period. So now i have to pay him the rent of 6 months (due to early vacating). Do i need to pay service tax on that also.
Kindly let me know.
Shyam Lal Naik
(Service)
(6156 Points)
Replied 05 March 2009
Interesting question.
The payment is certainly not for occupation of the property, but for non occupation of the same. The payment is for non fulfilment of expected contractual obligation.
As the consideration is not in the nature of rent, the same is not taxable in my humble opinion.
Rajesh Kumar
(Advocate- Tax)
(7806 Points)
Replied 05 March 2009
Shyam is right. If you are getting credit of service tax paid, pay and take credit. If not taking credit, dont pay.
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